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Suffering from Chinese investors' fear of debt contagion from the financial crisis in Europe, the Hang Seng Index dropped two per cent to 18,960.9 at close of trade. The China Enterprises Index of top mainland companies finished down 3.8 per cent, leaving it at 10,332.09.
In the day's most worrying news, the Shanghai Composite Index had its worst loss in nearly two months, falling 2.48 per cent to 2,466.96.
This followed on from the International Monetary Fund's (IMF) warning yesterday (November 15th) that China's banking system, despite ongoing reform, faces a steady build-up of financial sector "vulnerabilities".
Jonathan Fietcher, the head of the IMF team conducting the review, said: "While the existing structure fosters high savings and high levels of liquidity, it also creates the risk of capital misallocation and formation of bubbles, especially in real estate".
Posted by Greg Secker
